Total to change its name in pivot away from oil after stronger quarter
French oil and gas major looks to reduce the share of sales it derives from oil products over the next decade
Paris — France's Total on Tuesday posted better than expected earnings in the fourth quarter as oil prices stabilised, and said it would change its name as part of a push to diversify and grow renewable power and electricity production.
The French oil and gas major, which like rivals suffered in 2020 as fuel consumption tumbled during the pandemic, said it would rebrand as Total Energies as it tries over the next decade to reduce oil products to a third of its sales from over half now.
The company plunged to a $7.2bn net loss for 2020 as a whole, hit by about $10bn of impairments as oil prices collapsed. But it had already recorded most of the charges, including some linked to write downs on its Canadian oil sands assets, in the first half of 2020 and on an adjusted basis, net income came in at $4.06bn for the year.
Earnings fell less sharply in the fourth quarter than in the previous three months. Adjusted net income, which strips out some one off items, was down 59% from the year earlier period to $1.3bn, beating analysts' expectations, and in contrast with some peers including Shell.
“Overall a rock steady performance in a tough quarter and year,” analysts at Bernstein said in a note, adding that cash flow levels were strong.
Total shares were up 1.2%.
Chair and CEO Patrick Pouyanne said the company's rebranding reflected a bid to move as fast as possible as it tries to improve on its environmental goals.
“By proposing this name change to shareholders, we're also fundamentally asking them to approve this change in strategy,” Pouyanne said.
The group said it has already spent more than $2bn on acquisitions in the renewables sector in 2021, and planned to spend 20% of its investment budget for 2021 on this drive, up from about 15% in 2020.
Total will have about $5bn of investments to finance overall in the renewables segment in 2021, with a mixture of debt and capital, Pouyanne said, and about $60bn by 2030.
Total said the oil market outlook remained uncertain, and it would target another $500m in cost cuts in 2021, after saving $1.1bn in 2020.
It is targeting $12bn in net investments overall this year, down from $13bn last year.
Total forecast a 10% improvement in sales of liquefied natural gas in 2021, in part thanks to a ramp up of operations at the Cameron LNG export plant in the US.
It also on Tuesday signed a fiscal stability agreement with Papua New Guinea which could pave the way for work to begin on a long-stalled LNG project in the country.
Total said it would propose a dividend payout of 66 euro cents per share for the October to December period, in line with previous quarters in 2020.
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